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DRAFT Proceeds of Crime (Business in the Regulated Sector)
Order 2014
Article 1
Statutory Document No.
Proceeds of Crime Act 2008
PROCEEDS OF CRIME (BUSINESS IN THE
REGULATED SECTOR) ORDER 2014
Approved by Tynwald:
Coming into Operation:
October 2014
November 2014
The Department of Home Affairs makes the following Order under paragraph 3 of
Schedule 4 to the Proceeds of Crime Act 2008.
1
Title
This Order is the Proceeds of Crime (Business in the Regulated Sector) Order
2014.
2
Commencement
If approved by Tynwald, this Order comes into operation on 1 November 2014
3
Amendment of Schedule 4 of the Proceeds of Crime Act 2008
For paragraph 1 (business in the regulated sector) of Schedule 4 to the Proceeds
of Crime Act 2008 substitute the text set out in the Schedule to this Order.
4
Revocation
The Proceeds of Crime (Business in the Regulated Sector) Order 2013 is
revoked1.
MADE
J P WATTERSON
Minister for Home Affairs
1
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DRAFT Proceeds of Crime (Business in the Regulated Sector)
Order 2014
SCHEDULE
SCHEDULE
[Article 3]
AMENDMENT OF SCHEDULE 4 OF THE PROCEEDS OF CRIME ACT 2008
1
Business in the regulated sector
(1)
A business is in the regulated sector to the extent that it consists of—
(a)
business carried on by a building society within the meaning of
section 7 of the Industrial and Building Societies Act 1892;
(b)
business carried on by a society (other than a building society or
credit union) registered under the Industrial and Building Societies Act
1892;
(c)
any activity carried on for the purpose of raising money authorised
to be borrowed under the Isle of Man Loans Act 1974;
(d)
the business of an estate agent within the meaning of the Estate
Agents Act 1975;
(e)
the provision by way of business of audit services in respect of a
body corporate;
(f)
the business of an external accountant, where “external accountant”
means any person who, by way of business, provides accountancy
services to third parties and does not include accountants employed
by—
(i)
public authorities, or
(ii)
undertakings which do not by way of business provide
accountancy services to third parties,
and, for the avoidance of doubt, does not include an employed
person whose duties relate solely to the provision of accountancy
services to his or her employer.
(g)
2
any activity which is specified in subparagraph (h) that is
undertaken by —
(i)
an advocate within the meaning of the Advocates Act 1976;
(ii)
a registered legal practitioner within the meaning of the Legal
Practitioners Registration Act 1986;
(iii)
a notary public within the meaning of the Advocates Act 1995
and the Notaries Regulation 20002; or
(iv)
any other legal professional who by way of business provides
legal services to third parties,
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except for any such persons who are employed by public authorities
or undertakings which do not by way of business provide legal
services to third parties;
(h)
3
4
when undertaken by a person referred to in subparagraph (g)—
(i)
managing any assets belonging to a client;
(ii)
the provision of legal services which involves participation in
a financial or real property transaction (whether by assisting
in the planning or execution of any such transaction or
otherwise) by acting for, or on behalf of, a client in respect
of—
(A)
the sale or purchase of land;
(B)
managing bank, savings or security accounts;
(C)
organising contributions for the promotion, formation,
operation or management of bodies corporate;
(D)
the sale or purchase of a business; or
(E)
the creation, operation or management of a legal person
or legal arrangement;
(i)
insurance business within the meaning of the Insurance Act 2008;
(j)
the business of acting as an insurance manager for or in relation to
an insurer within the meaning of the Insurance Act 2008;
(k)
the business of insurance intermediary within the meaning of the
Insurance Act 2008;
(l)
any activity permitted to be carried on by a licence holder under a
casino licence granted under the Casino Act 1986 or on premises in
respect of which a temporary premises certificate is in issue under
Part IIA of that Act;
(m)
a collective investment scheme within the meaning of section 1 of
the Collective Investment Schemes Act 2008;
(n)
the business of a bookmaker within the meaning of the Gaming,
Betting and Lotteries Act 1988;
(o)
the business of providing online gambling within the meaning of
section 1 of the Online Gambling Regulation Act 2001;
(p)
the business of engaging in any regulated activity within the
meaning of the Financial Services Act 2008;
(q)
investment business within the meaning of section 3 of the Financial
Services Act 2008 and Class 2 of Schedule 1 to the Regulated
Activities Order 20113 whether or not exclusions or exemptions
contained within the Order or the Financial Services (Exemptions)
Regulations 20114 apply;
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(r)
corporate services or trust services within the meaning of section 3
of the Financial Services Act 2008 and Classes 4 and 5 of Schedule 1
to the Regulated Activities Order 2011 whether or not exclusions or
exemptions for that class contained within the Order or the
Financial Services (Exemptions) Regulations 2011 apply;
(s)
deposit taking within the meaning of section 3 of the Financial
Services Act 2008 and Class 1 of Schedule 1 to the Regulated
Activities Order 2011 whether or not exclusions or exemptions for
that class contained within the Order or the Financial Services
(Exemptions) Regulations 2011 apply;
(t)
business carried by a society registered as a credit union within the
meaning of the Credit Unions Act 1993;
(u)
acting as a retirement benefits schemes administrator within the
meaning of Part 6 of the Retirement Benefits Schemes Act 2000;
(v)
acting by way of business as the trustee of a retirement benefits
scheme within the meaning of the Retirement Benefits Schemes Act
2000;
(w)
any activity carried on for the purpose of raising money by a local
authority;
(x)
the business of a bureau de change;
(y)
the business of the Post Office in respect of any activity undertaken
on behalf of the National Savings Bank;
(z)
any activity involving money (including any representation of
monetary value) transmission services or cheque encashment
facilities;
(aa) the provision of safe custody facilities for cash or liquid securities on
behalf of other persons;
(bb) the business of dealing in goods of any description (including
dealing as an auctioneer) whenever a transaction involves accepting
a total cash payment of euro 15,000 or more;
(cc)
administering or managing money on behalf of other persons;
(dd) services to collective investment schemes as defined in section 3 of
the Financial Services Act 2008 and Class 3 of Schedule 1 to the
Regulated Activities Order 2011 ignoring any exclusions for that
class contained within the Order or the Financial Services
(Exemptions) Regulations 2011;
(ee) any business involving the issuing and managing of means of
payment (including but not limited to credit and debit cards,
cheques, traveller’s cheques, money orders, bankers’ drafts and
electronic money);
(ff)
subject to paragraph (2), lending including, but not limited to,
consumer credit, mortgage credit factoring and the finance of
commercial transactions;
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(gg) subject to paragraph (2), financial leasing arrangements in respect of
products other than consumer products;
(hh) subject to paragraph (2), the business of providing financial
guarantees and commitments;
(ii)
subject to paragraph (5), the provision of safe custody facilities,
deposit boxes or other secure storage facilities suitable for highvalue physical items or assets, jewellery, precious metals and stones,
bullion or documents of title;
(jj) the business of a tax adviser as defined by the Income Tax Act 1970;
(kk) the activity of a specified non-profit organisation
(ll) the business of a payroll agent
(mm) the business of issuing, transmitting, transferring, providing safe
custody or storage of, administering, managing, lending, buying,
selling, exchanging or otherwise trading or intermediating
convertible virtual currencies, including crypto-currencies or similar
concepts where the concept is accepted by persons as a means of
payment for goods or services, a unit of account, a store of value or
a commodity;
(nn) the business of selling or supplying controlled machines within the
meaning of the Gaming (Amendment) Act 1984.
(2)
(3)
A business is not in the regulated sector by reason only of the provisions
of subparagraphs (1)(ff), (gg) or (hh) if the lending, leasing or provision of
guarantees or commitments (as the case may be) is made by—
(a)
a parent undertaking to a subsidiary of that parent undertaking;
(b)
a subsidiary of a parent undertaking to the parent undertaking; or
(c)
a subsidiary of a parent undertaking to another subsidiary of that
parent undertaking.
In subparagraph (1)—
A “Specified Non-Profit Organisation” is a body corporate or other legal
person, trustees of a trust, partnership, other association or organisation and
any equivalent or similar structure or arrangement; established solely or
primarily to raise or distribute funds for charitable, religious, cultural,
educational, political, social or fraternal purposes with the intention of
benefiting the public or a section of the public and which has(i) an annual or anticipated income of £5,000 per annum or more; and
(ii) remitted, or is anticipated to remit, at least 30% of its income in any
one year to one or more ultimate recipients in or from one or more
higher risk jurisdictions;
A “higher risk jurisdiction” is a jurisdiction stated on a list maintained by the
Financial Supervision Commission on its website or one which the relevant
business determines to be so having considered any relevant guidance.”
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A “Payroll Agent” is a person or business who is involved with the payment of
earnings to or for the benefit of any person, where the payroll agent is not that
person’s employer. A “Payroll Agent” does not include services provided by
technical service providers, which support the provision of payment services,
without the provider entering at any time into possession of the funds to be
transferred, including—
(i) the processing and storage of data;
(ii) trust and privacy protection services;
(iii) data and entity authentication;
(iv) information technology and communication network provision; and
(v) the provision and maintenance of terminals and devices used for
payment services;
(4)
In subparagraph (2)—
“parent undertaking” means an undertaking which, in relation to another
undertaking (a “subsidiary”)—
(a)
owns or controls, whether directly or indirectly, shares or other
interests in the subsidiary together aggregating in excess of 50 per
cent of the votes exercisable at general or other meetings of the
subsidiary on any or all matters;
(b)
has a right to appoint or remove a majority of its board of directors,
or other governing body;
(c)
has the right to exercise a dominant influence over the subsidiary—
(d)
(i)
by virtue of the provisions contained in the subsidiary’s
constitutional documents, or
(ii)
by virtue of a control contract; or
controls, alone or pursuant to an agreement with other persons, a
majority of the voting rights in the subsidiary; and
“undertaking” means a natural person, body corporate, trustees of a trust,
partnership, foundation or unincorporated association.
(5)
For the purposes of subparagraph (3)—
(a)
an undertaking is taken to have the right to exercise a dominant
influence over another undertaking only if it has a right to give
directions with respect to the operating and financial policies of that
other undertaking with which its directors are, or governing body
is, obliged to comply whether or not they are for the benefit of that
other undertaking;
(b)
“control contract” means a contract in writing conferring a
dominant influence right which—
(i)
is of a kind authorised by the constitutional documents of the
undertaking in relating to which the right is exercisable; and
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(ii)
(c)
(6)
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is permitted by the law under which that undertaking is
established; and
any undertaking which is a subsidiary of another undertaking is
also a subsidiary of any further undertaking of which that other is a
subsidiary.
A business is not in the regulated sector by reason only of the provisions
of subparagraph (1)(ii) if the services provided are—
(a)
the storage of goods such as luggage, household items or motor
vehicles;
(b)
the storage of non-physical property such as computer data;
(c)
the secure transportation of high value items;
(d)
the offering of safe custody on an occasional or very limited basis,
such as hotels providing a safe for use by guests; or
(e)
legal professionals storing legal documents other than documents of
title.
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Explanatory Note
EXPLANATORY NOTE
(This note is not part of the Order)
This Order replaces paragraph 1 of Schedule 4 to the Proceeds of Crime Act 2008 (“the
Act”). That paragraph sets out the list of businesses that are businesses in the regulated
sector for the purposes of the Act. The substituted paragraph 1 updates the list to
ensure that all relevant businesses are subject to the anti-money laundering provisions
of the Act.
The main change made in the substituted paragraph 1 is the inclusion of certain
categories of business that pose a higher potential money laundering and terrorist
financing risk. This change will aid the Island in meeting its obligations under
international requirements.
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